BILL ANALYSIS �
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THIRD READING
Bill No: AB 2692
Author: Fong (D)
Amended: As introduced
Vote: 27
SENATE ELECTIONS & CONSTIT. AMEND. COMMITTEE : 4-0, 6/17/14
AYES: Padilla, Hancock, Jackson, Pavley
NO VOTE RECORDED: Anderson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 5/19/14 - See last page for vote
SUBJECT : Political Reform Act of 1974: expenditures
SOURCE : Author
DIGEST : This bill requires a person who improperly benefits
from the personal use of campaign funds to forfeit the value of
the personal benefit received, as specified.
ANALYSIS : Existing law requires campaign expenditures to be
reasonably related to a political, legislative, or governmental
purpose. Campaign expenditures that confer a substantial
personal benefit on an individual with the authority to approve
the expenditure of campaign funds must be directly related to a
political, legislative, or governmental purpose. The term
"substantial personal benefit" for these purposes means an
expenditure that results in a direct personal benefit of more
than $200. A violation of these provisions is punishable as
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follows:
1. By a fine of up to $5,000 per violation in an administrative
proceeding by the Fair Political Practices Commission (FPPC);
or,
2. By a penalty of up to three times the amount of the unlawful
expenditure, in a civil action brought by the FPPC.
This bill:
1. Requires a person who improperly benefits from the personal
use of campaign funds to forfeit the value of the personal
benefit received, as specified.
2. Provides that if the FPPC determines in an administrative
action that an expenditure was made that confers a
substantial personal benefit to a person who had the
authority to approve that expenditure, but the expenditure is
not directly related to a political, legislative, or
governmental purpose, that the individual who received the
substantial personal benefit shall pay to the General Fund of
the state an amount equal to the substantial personal benefit
that he or she received.
3. Provides that a payment to the General Fund of the value of
the benefit received, as required by this bill, shall be in
addition to any penalty imposed by the FPPC.
Background
Personal Use of Campaign Funds . Existing law generally
prohibits campaign funds from being used for personal expenses,
and instead requires campaign expenditures to be reasonably
related to a political, legislative, or governmental purpose.
When a campaign expenditure results in a personal benefit of
more than $200 to an individual who had the authority to approve
the expenditure, the expenditure must be directly related to a
political, legislative, or governmental purpose. These
provisions are intended to ensure that campaign funds are not
used as a method of personally enriching candidates and officers
of political committees.
As is the case with other suspected violations of the Political
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Reform Act, the FPPC may bring an administrative enforcement
action if it believes that an individual or a committee has
improperly used campaign funds for personal purposes. When the
FPPC determines that a violation has occurred, it can impose a
monetary penalty of up to $5,000 per violation.
Because the maximum monetary penalty available in an
administrative enforcement action is not dependent on the value
of the personal benefit received, it is possible that a person
could receive an improper personal benefit from campaign
spending that exceeds the maximum penalty that the FPPC can
impose through the administrative process. The FPPC does have
the ability to bring a civil lawsuit for a violation of the
personal use provisions of law, in which case the maximum
monetary penalty available is three times the amount of the
unlawful expenditure. Such civil lawsuits, however, are
uncommon, and the FPPC deals with a substantial majority of
enforcement cases through its administrative enforcement
process.
Related Legislation
AB 1692 (Garcia), prohibits the use of campaign funds to pay a
fine, penalty, judgment, or settlement that is imposed for the
improper personal use of campaign funds, among other provisions.
SB 831 (Hill), prohibits the expenditure of campaign funds for
specified purposes, including personal vacations, payments for
membership dues for a country club or health club, clothing to
be worn by the candidate or officeholder, tuition payments, and
others.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/30/14)
League of Women Voters of California
ARGUMENTS IN SUPPORT : According to the author's office,
California law recognizes that ethical concerns may arise when a
candidate personally benefits financially from contributions
received by his/her campaign. For that reason, the Political
Reform Act prohibits campaign funds from being used to
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compensate a candidate or elected officer for the performance of
political, legislative, or governmental activities, except for
reimbursement of out-of-pocket expenses incurred for political,
legislative, or governmental purposes. Additionally, state law
prohibits candidates and committee officers from using campaign
funds for personal expenses.
Individuals who violate the "personal use" provisions of
California law are subject to civil or administrative fines, but
existing law does not require a person to forfeit the personal
benefit that he or she received from the illegal expenditure of
campaign funds. The purpose of California's "personal use"
restrictions on campaign funds is to ensure that funds solicited
for campaign purposes are used for those purposes, and are not
used to personally enrich candidates, officeholders, and
political committee officers. To further that purpose, and to
provide a greater disincentive against the improper use of
campaign funds, this bill requires individuals who violate the
"personal use" laws to forfeit the improper benefits that they
received, in addition to any fines they face for violating state
law.
ASSEMBLY FLOOR : 76-0, 5/19/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Olsen, Pan,
Patterson, Perea, John A. P�rez, V. Manuel P�rez, Quirk,
Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner,
Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,
Williams, Yamada, Atkins
NO VOTE RECORDED: Mansoor, Nazarian, Nestande, Vacancy
RM:d 7/2/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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